Cloud Stocks: RingCentral Acquires And Adds Partners, But PaaS Is Still Missing

According to a recent market report, the global Unified Communication-as-a-Service (UCaaS) market is expected to grow at a CAGR of 23.5% from $38.74 billion in 2020 to $169.63 billion by 2027. Leading UCaaS service provider RingCentral (NYSE: RNG) recently announced its fourth-quarter results that continued to surpass market expectations.

RingCentral’s Financials

RingCentral’s fourth-quarter revenues grew 32% to $335 million, significantly ahead of the market’s forecast of $317.4 million. Non-GAAP net income per diluted share was $0.29, ahead of the Street’s estimates of $0.27.

By segment, software subscriptions revenue increased 34% to $306 million. Other revenues grew 16% to $28.8 million.

Among key metrics, Annualized Exit Monthly Recurring Subscriptions (ARR) grew 35% to $1.3 billion. RingCentral Office ARR increased 39% to $1.2 billion. Mid-market and Enterprise ARR, defined as customers with $25,000 or more in ARR, increased 49% to $713 million. Enterprise ARR, defined as customers with $100,000 or more in ARR, increased 55% to $454 million. Channel ARR increased 59% to $465 million.

RingCentral ended the year with revenues growing 31% to $1.2 billion. Adjusted net income per diluted share was $0.98, compared to $0.82 in 2019.

For the first quarter, RingCentral expects revenues of $337-$340 million, representing an annual growth of 26% to 27%. It expects subscription revenues of $311.5-$315.5 million, representing an annual growth of 28-29%. Non-GAAP EPS is expected to be $0.24-$0.257. For the full year, it expects revenues of $1.475-$1.490 billion, representing an annual growth of 25% to 26%. Non-GAAP EPS is expected to be $1.20 to $1.24.

RingCentral’s Growth Focus

During the quarter, RingCentral announced its acquisition of California-based DeepAffects. Founded in 2017 by Prashant Kukde and Sushant Hiray, DeepAffects creates intelligent technology that uses human speech conversations, emotional cues, and intents to respond to humans. Prior to the acquisition, DeepAffects had raised $200,000 in a round of funding from VDOSH. RingCentral plans to leverage the acquisition to provide enhanced pre-meeting, in-meeting, and post-meeting experiences for its customers. The terms of the deal were not disclosed.

1 2
View single page >> |

Disclosure: All investors should make their own assessments based on their own research, informed interpretations and risk appetite. This article expresses my own opinions based on my own ...

more
How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.